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Auto Dealer Bond New York

Get a New York Auto Dealer Bond through Viking Bond Service

Did you know that New York state auto dealers sold over one million new vehicles in 2018? Add in all the used vehicles sold as well and it's clear why the auto industry did over $33 billion in vehicles that year according to data from Auto Alliance. Businesses focused on vehicle sales clearly have a lot of potential, but you need to clear some hurdles before you're allowed to operate legally. Viking Bond Service is here to help with one — obtaining New York Motor Vehicle Bond.

New York Auto Dealership Bonds Explained

From March 28, 2017 all New York State auto dealerships will need to have an auto dealer bond. These bonds are a type of license surety bond that provide a guarantee that an auto dealership will abide by state regulations. This provides a guarantee for consumers and ensures that there is a level of financial protection for them should the dealership break the terms of a car sale agreement.

The new auto bond regulations have changed the amount of bond coverage that is required of new and used car dealers in New York. The new rules split the dealerships into two tier levels: those who sell less than 50 cars per year, and those that sell more than 50 cars per calendar year. The dealerships in the lower tier will need a bond of $20,000. The auto dealers in the higher tier will need to purchase a $100,000 bond.

What parties are involved in an Auto Dealer Bond New York?

Like all surety bonds, New York auto dealer surety bonds are agreements between three equal parties:

• The obligee, who is the party that requires the bond. This would be New York State for NY auto dealer bonds. If an auto dealer breaks laws governing auto sales, the obligee has the right to file a claim against the bond and seek compensation for any damage done.
• The surety, who acts as the underwriter of the bond and provides the financial guarantee. If a claim is filed against the bond and the principal is unable or unwilling to pay, the surety agrees to pay up to the limit of the bond. However, after paying, the surety will do whatever is necessary to collect that same sum from the principal.
• The principal, who is the auto dealer required to get the bond. If the obligee files a valid claim against the bond, it's the principal's responsibility to pay, either immediately or else after the surety has stepped in to compensate the obligee.

Who needs an Auto Dealer Bond New York?

As mentioned above, New York State requires all auto dealerships to have an auto dealer bond before being granted an auto dealer license as mandated by the New York State Department of Motor Vehicles. Selling vehicles without a bond is illegal and could result in hefty fines, permanent loss of license, or even jail time in extreme instances. Therefore, it's critical, both personally and professionally, that you get a New York Motor Vehicle Bond early in the life of your business. Anyone who intends to sell 6+ vehicles within a 12-month span needs a license as well as a bond.

How are Auto Dealer Bonds in New York Obtained?

The application process is relatively simple to obtain an auto dealer bond. To start you'll need to submit an application form along with the documents requested by the bonding company. These documents could include business financial statements and credit information. Underwriters at the bonding company will then use that information to evaluate your credit risk. Essentially, they're trying to determine how likely you are to pay for any claims filed against the bond, either before or after the surety company steps in. Applicants with a higher risk will likely pay a higher premium, but they will rarely be turned away because of a low credit. Thanks to Viking Bond Service, anyone can obtain the New York motor vehicle surety bond they need to get their business started.

The cost to obtain an Motor Vehicle Dealer Bond NY

Motor vehicle dealer bonds in NY generally cost between one and three percent of the bond amount. The exact amount is determined by what risk level the bonding company places on the bond. The risk factor is determined by many factors including the financial records of the dealership and the credit score of the business owner(s). While people with a stronger financial and credit record will pay a lower premium for their motor vehicle surety bond in New York, we work with business owners of all credit levels. When considering the cost of New York motor vehicle bond, factor in the renewal costs as well, which we will discuss in the next section. Claims can also be costly, but you can avoid these by simply following all laws and codes of conduct applicable to your business.

How to renew a New York Auto Dealer Bond

Bonds like these stay active for 12 months. Once they expire, the surety company no longer agrees to compensate claims and your motor vehicle license becomes invalid as a result. Effectively, your business is illegal as soon as the bond expires. Fortunately, a company like Viking Bond Service will send you renewal notice far in advance of expiration. To renew, you will provide any financial or business related information that may be requested, which underwriters will use to reevaluate your credit risk. While premiums don't typically change at renewal, improvements in credit standing could lead to a lower premium for the bond. The same holds true for severely diminished credit or financial standing, higher premiums could be required in these cases. Once that premium is paid, the bond is active for another 12 months. Smart dealerships plan for the renewal costs as part of their annual budget.

How Viking Bond Service can help you get a New York Auto Dealer Bond

Viking Bond Service can help you secure a New York motor vehicle dealer bond quickly and easily. Our dedicated team are bond experts with years of New York auto dealer surety dealer bond experience. We process most quote requests within 24 hours and help guide you through the application process so you get the bond you need when you need it. Count on us to provide everything necessary before, during, and after you apply for your bond. With Viking Bond Service, you have a true surety bond partner.

Request a New York Bond Quote

If you know your business requires a New York auto dealer bond, don't wait to apply. Get the process started right now by taking just a few minutes to complete our easy online application. You can also fill out our contact form if you have questions about anything or call us at 1-888-278-7389. Please reach out if we can assist you in any way!